"Management is Prediction. The theory of knowledge that management in any form is prediction" (Page 101, The New Economics by W. Edwards Deming)

"Knowledge is built upon theory... Rational prediction requires theory and build knowledge through systematic revision and comparison of theory based on comparison of prediction with observation." (Page 102, The New Economics by W. Edwards Deming).

"No true value... Change of procedure for measurement (change in operational definition) or observation produces a new number."

The Theory of knowledge is the most difficult part of Deming's system of profound knowledge for most to understand. And as a result it is also an area that often is under appreciated. Some of the difficulty managing with data can be minimized with an understanding of the theory of knowledge.

Many fail to predict when attempting to experiment and test. Without prediction learning is much less than it would be. When it is understood that management is based on prediction then the impact of all the other 3 areas of the system of profound knowledge are clearer. By exploring the basis for the prediction that one is making, one must understand the theory they are using to make the prediction.

Most often people fail to develop a theory that allows them to predict (they just act without theory or with a undefined vague idea of what they expect). They fail to predict the results of an experiment (an attempt to improve the existing results - PDSA) and they fail to analyze the results of the experiment. So they fail to learn about the system that they are managing and therefore cannot refine their theory based on their learning. When failing to do these things is it a surprize that learning is very ineffective? And without learning can significant improvement be expected?

With, even a fairly simple understanding of the theory of knowledge the effectiveness of management improvement efforts are greatly increased. This topic is difficult for most to understand, I recommend reading chapter four of the New Economics. And I recommend returning to that chapter periodically as you apply management improvement techniques and learn and grow as a manager.

Dunning-Kruger effect - incompetent individuals tend to overestimate their own level of skill, fail to recognize genuine skill in others, and fail to recognize the extremity of their inadequacy. If they are trained to substantially improve their own skill level, these individuals can recognize and acknowledge their own previous lack of skill.